The Essential Elements to Consider When Making Bid/No-Bid Decisions

The Essential Elements to Consider When Making Bid/No-Bid Decisions

The Essential Elements to Consider When Making Bid/No-Bid Decisions

Posted on April 8, 2021

The Essential Elements to Consider When Making Bid/No-Bid Decisions

One of the hardest decisions any construction firm is going to make is when to bid and when not to bid. This is not a question that should be taken lightly. It takes significant time and resources to create a worthy bid, and you do not want to waste this on an unvetted project.

Today we will go over some of the factors that can be considered when making a decision. You are free to call Fund Control at 800-625-5972 if you have questions about how our Fund Control software is disrupting the industry in the best possible way.

Start with Profitability

Of course, no company is going to bid if they do not think they can make a decent profit. However, all too often, we see clients who figure all the other elements out before they really look at profitability. If you go at it from that angle, you will be wasting time. Start by crunching the numbers, including your labor and equipment costs, so that you know up front what needs to be done to make a profit. You can then tailor every other step around those needs.

Is Your Firm Capable of Completing the Job?

Once you have determined that you can make money on the job, it is time to consider if you can reasonably complete the job. Look at your backlog of work and your upcoming projects. Consider if you will have the equipment, staff, and labor to get the job done. Consider the ongoing supply-chain issues and how they might impact your company’s capabilities, too.

Along those lines, make sure that your company has the funds required to handle the project. Do you have the bonding capacity? Is your cash flow such that you can get the work done without putting other obligations in danger? It is important to know your limits.

Look at Your Past Jobs

Now take a look at the jobs you have been successful on in the past and determine what made – or broke – those cases. It might be that you have found success when you bid higher and nothing but headaches on low-bid projects. This lets you know that it might not be worth getting a project if you have to lower your bid significantly.

Look too at your performance on a job. Just because you can complete a project does not mean you can do so well. If you do not yet have the experience or manpower to complete a job that the client will be happy with, then it will not be worth the hit to your reputation to do the job.

Fund Control is Here to Help Banks, Disbursement Companies, and More

If you are a bank, disbursement company, mortgage company, or private equity firm that is working to improve the results you can offer clients, Fund Control can help. Contact us today for your own free demo.